Small Businesses Drive Social Media – And Vice Versa

NEW YORK – In contrast to a few years ago when small businesses were almost nonexistent online, entrepreneurs and start-ups are increasingly using social media to connect with consumers and promote growth, according to a new survey by Citibank.

Sixty-five percent of small-business owners said increasing marketing activities online was a key goal to growing their businesses, and 41 percent said they have used social media in the past year.

“Although small-business owners have been slower to adopt online marketing channels, they are clearly warming up to using these tools to target customers,” said Maria Veltre, managing director of small business marketing and customer experience at Citibank. “They are seeing that social media platforms can be an efficient and cost-effective means to increase awareness of their business, engage with customers, and ultimately drive growth.”

Forty percent of small-business owners said they planned to use social-networking sites including Facebook, Twitter and LinkedIn for marketing – up 10 points from a previous Citibank survey in 2010. The use of social media overall is up 6 points from 2010, according to the data.

As more sites, such as Facebook, hone in on marketing maneuvers that appeal to advertisers, it seems social media will only continue to rise. Recent data showed that total U.S. mobile and social media revenue, including consumer and business access, content, advertising and marketing, increased 30.2 percent to $45.4 billion in 2011, according to a PQ Media forecast (Response This Week, Feb. 15, 2012). Mobile and social media revenue rose at a compound annual growth rate of 28.7 percent from 2006 to 2011, and is expected to continue to grow at an accelerating 30.8 percent in 2012.

Together, mobile and social media accounted for 4.1 percent of overall communications industry revenue from 2011, up from only 1.3 percent in 2006. Eleven of the 44 mobile and social media revenue streams surpassed $1 billion in 2011, and 23 others will do so by the end of 2016, data showed. Though online social media was the smallest sector in 2011 with $2.8 billion in revenue, it grew a very strong 42.1 percent, according to PQ Media.

“Social network media was the largest and fastest growing segment by far, increasing 45.9 percent to $2.3 billion in 2011,” PQ Media said.
In another boost to social media’s marketing power, Facebook was deemed the strongest digital media brand among advertisers, replacing Google, according to the latest annual Advertiser Perceptions Inc. survey.